Muthoot Finance seeks RBI nod to launch prepaid cards
Gold financier Muthoot Finance, which has entered the white label ATM space, has sought permission from the Reserve Bank of India (RBI) to pre-load part of gold loans in dedicated cards.
"We have written to the RBI to allow us to disburse money through cards under which an amount can be pre-loaded on them and withdrawn by the gold loan customer whenever needed," Muthoot Finance chief executive (ATM division) P E Mathai told PTI in Mumbai.
Such a scheme will benefit both the company as well as borrowers, he said, adding that the charging of interest can start after the withdrawal of the amount.
The money can be withdrawn at any ATM or among the 9,000 white label cash vending machines which the Muthoot Group is targeting to put up in the next three years, he said.
Commercial banks already offer a similar scheme under their Kisan Credit Card programme for farmers.
Muthoot Finance has also requested the RBI to allow it to launch a special card to take care of remittances, under which a receiver could be able to make use of ATMs to withdraw transferred amounts, Mr Mathai said.
Explaining the proposal, he said "anybody can send money into the card and it can be withdrawn by the beneficiary from an ATM", and added this will be applicable for both the domestic and international remittances.
He claimed the banking regulator has given an "in-principle" approval for both the proposals, but is yet to formally communicate it to the company.
Meanwhile, the company on Wednesday launched its 15th ATM - the first in the Mumbai metropolitan region - at Virar, a distant suburb.
Mr Mathai said the ATMs, being put up at Muthoot Finance's own branches to start with, will be feasible only if around 70-80 transactions take place on a daily basis.
ATMs at non-branch locations will need to log at least 150 transactions a day to become feasible as cost of rentals and security get added at these sites, he said.
